TRANSITION SERVICES AGREEMENT
Exhibit 10.110
EXECUTION COPY
THIS TRANSITION SERVICES AGREEMENT, dated as of May 4, 2010 (“Effective Date”), by and
between Xxxxxx Xxxx Xxxxxx Limited (“CHH”) and Evergreen Packaging Inc. (“Evergreen”) (this
“Agreement”).
WHEREAS, Evergreen is contemporaneously with the execution and delivery of this Agreement
being sold by subsidiaries of Service Provider to Xxxxxxxx Group Holdings Inc. (the “Buyer”);
WHEREAS, Buyer and Evergreen desire in connection with the aforementioned transaction that the
Service Provider (as defined below) provide the services identified on Schedule I hereto
(“Services”) to Evergreen and its affiliates engaged in the beverage packaging business (Evergreen,
together with such affiliates, the “Service Receivers”) pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective warranties, covenants and
agreements below, and intending to be legally bound, the parties agree as follows:
Section 1. Definitions
In this Agreement, the following terms shall have the following meanings.
“Xxxx Group” means (i) Xxxxxx Xxxx, (ii) his spouse and members of his immediate family
(including siblings, children, grandchildren and children and grandchildren by adoption) and (iii)
in the event of incompetence or death of any of the persons described in clauses (i) and (ii)
hereof, such person’s transferee by will, estate, executor, administrator, committee or other
personal representative.
“GST” means taxes payable pursuant to the GST Act.
“GST Act” means the New Zealand Goods and Services Tax Xxx 0000.
“Person” means an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
“Recipient” has the meaning set forth in Section 8(a).
“Required Consents” means any consent, waiver, permit or sublicense required under the terms
of any agreement between the Service Provider and a third party in order for the Service Provider
to provide the Services.
“Service Provider” means CHH or any of its affiliates (other than any Service Receiver)
providing the Services pursuant to this Agreement.
“Service Receiver Data” means all of the data provided by the Service Receiver or created by
or for the Service Provider solely on behalf of the Service Receiver that is used by the Service
Provider in relation to the provision of the Services, including employee information, customer
information, product details and pricing information.
“Supplier” has the meaning set forth in Section 8(a).
“Taxable Supply” shall have the meaning given to it in the GST Act.
Section 2. Services; Parties’ Obligations
(a) Commencing on the Effective Date, the Service Provider shall provide the Services to the
Service Receiver in accordance with this Agreement.
(b) If, after the execution of this Agreement, a Service Receiver determines that a service is
provided to it by one of the Service Providers as of the Effective Date, but such service was
inadvertently omitted from the applicable Schedule, the Service Receiver shall so notify the
Service Provider and such omitted service shall be added by amendment to Schedule I, with
reasonable adjustments to pricing (which shall in any event be determined using the same
methodology as for the other Services hereunder) and term as might be appropriate under the
circumstances.
(c) The Service Receiver may request an additional service by providing the Service Provider
with reasonable prior written notice. The parties shall negotiate in good faith the provision of
such additional service. If the parties reach agreement regarding the terms on which such service
will be provided, Schedule I shall be amended by adding such additional service.
(d) The Service Provider shall perform the Services (i) in a manner substantially consistent
with its past practices, including as to nature, scope, volume, quality and timeliness, using at
least the same standard of care that the Service Provider used in the six (6) months’ period
immediately prior to the Effective Date in performing the Services for the business of the Service
Receiver, and (ii) in compliance with all applicable laws.
(e) The Service Provider will comply with all health and safety and other reasonable policies
and procedures of the Service Receiver in providing the Services at the premises of the Service
Receiver (to the extent such policies and procedures are identified to the Service Provider).
(f) To the extent that CHH or Evergreen will not itself provide or receive, respectively, any
Service because such Service is to be provided or received by another Service Provider and Service
Receiver, respectively, then CHH and Evergreen shall be liable for the due and timely performance
of the obligations hereunder by such Service Provider or Service Receiver, respectively.
2
Section 3. Fees and Costs; Audit
(a) The Service Receiver shall pay the Service Provider a fee equal to the Service Provider’s
actual internal costs and expenses reasonably incurred in providing the Services, including, for
the avoidance of doubt, the cost of the Service Provider’s personnel and employees providing the
Services. The fee for a given Service shall be as set forth on Schedule I.
(b) The Service Receiver shall reimburse the Service Provider for any actual third-party costs
and expenses that the Service Provider reasonably incurs in providing the Services, including (i)
the cost of any third-party software licenses required to perform the Services, and (ii) the
services of any third-party consultants reasonably required to deliver the Services.
(c) Within twenty-one (21) days of the last day of each calendar month, the Service Provider
shall provide to the Service Receiver an invoice for the preceding month’s Services, which shall
include (i) a description of the Services provided by the Service Provider to the Service Receiver
for such month, (ii) the costs and expenses due in respect of such Services, which shall be a fixed
amount (the “Fixed Amount”) based on budgeted costs plus the corresponding GST (if any),
the cost of which shall be borne by the Service Receiver in accordance with Section 8, and (iii)
reasonable documentation verifying such costs and expenses. The Fixed Amount shall be paid by the
Service Receiver in full within fifteen (15) days of the Service Receiver’s receipt of the invoice
to an account designated by the Service Provider.
(d) Before March 31 of a given calendar year, the Service Provider shall conduct an annual
adjustment of the Fixed Amounts paid by the Service Receiver during the preceding calendar year to
adjust the actual costs and expenses incurred by the Service Provider in connection with the
provision of the Services during such preceding year. If the adjustment discloses that the Service
Receiver owes additional amounts to the Service Provider, the Service Receiver shall pay such
amounts promptly after the receipt of the notice thereof from the Service Provider, such notice to
be accompanied with reasonable documentation verifying such costs and expenses. Conversely, if the
adjustment discloses that the Service Receiver has overpaid with respect to any Services, the
Service Provider shall promptly return any such funds to the Service Receiver.
(e) At the request and expense of the Service Receiver, the Service Provider shall permit the
Service Receiver or its authorized representatives, at reasonable intervals and times and upon
reasonable notice (but no more than once in any twelve (12)-month period), to examine the Service
Provider’s books and records relating to the costs and expenses of the Services. If, as a result of
such audit, the Service Receiver determines that:
(i) the Service Provider has overcharged the
Service Receiver, the Service Receiver shall notify the Service
Provider thereof and the parties shall discuss in good faith the
overcharged amount. If, within thirty (30) days of commencement of such
discussion, the Service Provider does not agree with the overcharged
amount, the dispute shall be resolved according to the procedures set
forth in Section 5 hereof. If, on the other hand, the Service Provider
agrees to the overcharged amount, the Service Provider shall pay
promptly to the Service
3
Receiver the amount of the overcharge, plus interest at the rate per annum equal to the 90-Day
Treasury Rate in effect on the date the audit is completed, calculated from the date of receipt by
the Service Provider of the overcharged amount until the date of payment to the Service Receiver.
(ii) the Service Provider has undercharged the Service Receiver, the Service
Provider shall promptly invoice the Service Receiver and the Service Receiver shall
promptly pay the additional amount due.
Section 4. Representations; Disclaimer of Warranties
(a) Each party warrants and represents to the other party that such party
(i) has the legal capacity and authority to enter into this Agreement, to become legally obligated
under the terms of this Agreement, and to perform its obligations under this Agreement, and
(ii) will comply at all times during the term hereof with applicable laws associated with
providing the Services hereunder.
(b) EXCEPT AS PROVIDED IN THIS AGREEMENT, CHH MAKES NO
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
INCLUDING ANY REPRESENTATION OR WARRANTY AS TO THE QUALITY OR
CONDITION OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF
THE SERVICES TO BE PROVIDED UNDER THIS AGREEMENT.
Section 5. Project Managers; Resolution of Disputes
(a) The parties shall each appoint a person to act as its project manager in relation to the
Services (each, a “Project Manager”) to facilitate orderly provision and receipt of the Services
and to deal with issues arising out of the performance of the Services and to hold preliminary
discussions to resolve any claims or disputes (“Disputes”) in connection with the Agreement. The
Project Manager for CHH will be Xxxxxxxx Xxxx, and the Project Manager for Evergreen will be Xxxxx
Xxxxxxxxx.
(b) If the parties’ Project Managers are unable to resolve any Dispute during the 45-day
period beginning on the date the Project Manager of a party receives written notice of the Dispute
from the Project Manager of the other party, then the parties shall jointly submit the unresolved
Dispute to Xxx X’Xxxxxxx (or his successor), or a person chosen by Xxx X’Xxxxxxx (or his
successor), who shall act as an arbitrator to determine the Dispute as soon as practicable.
Section 6. Ownership of Data
The Service Receiver Data (including all intellectual property rights therein) shall be and
shall remain the property of the Service Receiver. All other data, information and intellectual
property used by the Service Provider in connection with provision of the Services shall remain
property of the Service Provider.
4
Section 7. Third-Party Arrangements
(a) The Service Receiver acknowledges that the Services provided through third parties or
using third-party information, systems, software and/or equipment are subject to the terms of
applicable agreements between the Service Provider and such third parties, and the Service Receiver
agrees to comply with such terms, provided they have been first disclosed to the Service
Receiver in writing and relate to the Service Receiver’s use of the Services.
(b) Subject to Section 7(c), the Service Provider shall grant to the Service Receiver a
sub-license or sub-lease, as applicable, under rights it may have, if any, in such third party
information, systems, software or equipment, but only to the extent it has the right to grant such
sub-license or sub-lease.
(c) To the extent that the Service Provider requires a Required Consent in order to provide
the Services, including products and services under third-party procurement contracts, the Service
Provider must use its commercially reasonable efforts to obtain any such Required Consent. In the
event that the Service Provider is unable to obtain any such Required Consent, the parties will
work together to agree upon a commercially reasonable alternative arrangement.
Section 8. Goods and Services Tax
(a) If one party (“Supplier”) makes a Taxable Supply to another party (“Recipient”) pursuant
to this agreement, then the Recipient will pay to the Supplier, in addition to, in the same manner
and at the same time as, any other consideration that is payable to the Supplier for that supply,
an amount equal to the GST on that supply and the Supplier will issue a tax invoice to the
Recipient in respect of that supply.
(b) Whenever section 25(1) of the GST Act applies, the Supplier must issue to the Recipient a
credit note or debit note (as appropriate) and the Recipient must pay to the Supplier, or the
Supplier must pay to the Recipient, an amount equal to the GST shown in that document.
(c) If a party is entitled under this agreement to be reimbursed or indemnified by another
party, the amount claimed by the party seeking reimbursement or indemnification must be net of any
input tax credit or deduction from output tax to which the party seeking reimbursement or
indemnification, or where that party is a member of a GST group under section 55 of the GST Act,
the representative member of that group, is entitled.
Section 9. Term; Termination and Effects of Termination
(a) Subject to Section 8(c) or as otherwise indicated on Schedule I, this Agreement
commences on the Effective Date and shall remain in effect with respect to a given Service (or part
of a Service) until the Service Receiver terminates such Service (or part of a Service) in
accordance with Section 8(b). Notwithstanding the foregoing, this Agreement (i) shall terminate
from and after the date on which all or a portion of the equity interests of Evergreen or CHH or
any parent entity of Evergreen or CHH is issued to or sold, assigned or otherwise transferred to
any Person that is not controlled directly or indirectly by the Xxxx Group,
5
(ii) shall terminate with respect to a given Service Receiver (other than Evergreen), from and
after the date on which all or a portion of the equity interests of such Service Receiver is issued
to or sold, assigned or otherwise transferred to any Person that is not controlled directly or
indirectly by the Xxxx Group and (iii) shall terminate, with respect to a given Service, from and
after the date on which all or a portion of the equity interests of the Service Provider providing
such Service (other than CHH) is issued to or sold, assigned or otherwise transferred to any Person
that is not controlled directly or indirectly by the Xxxx Group. Upon termination of this Agreement
under this Section 8(a), any Service Receiver may elect to continue receiving the Services from the
Service Providers for a period of up to six (6) months, in which case the following Sections shall
survive any such termination during such six (6)-month period: Sections 2(e)-(f); Section 3;
Section 5(b); Section 7; and Sections 8(b)-(c).
(b) The Service Receiver may discontinue a particular Service, or part of a Service, by giving
the Service Provider (i) (10) ten days’ prior written notice or (ii) such notice as required under
the terms of the third-party agreement pursuant to which such Service (or part thereof) is being
provided; provided, however, if any Service Receiver intends to terminate a
particular Service (or part thereof) because such Service Receiver wishes to receive such Service
(or part thereof) from a third party and the Service Provider reasonably determines that it would
incur costs that would not have been incurred but for such Service termination, the Service
Receiver shall bear all such costs. The Service Receiver will not be obliged to pay any further
costs or expenses in respect of any such discontinued Services or part of a Service.
(c) In the event that a party (“Defaulting Party”) commits a material breach of any of the
terms or conditions of this Agreement, which is not cured within ten (10) days after notice of such
breach by the other party (“Notifying Party”), the Notifying Party may terminate this Agreement by
giving notice in writing to the Defaulting Party (it being understood that a good faith dispute
over an invoice shall not constitute a breach of this Agreement).
(d) Upon termination or expiration of this Agreement, the Service Receiver shall pay to the
Service Provider all monies due to the Service Provider in respect of Services provided prior to
such termination or expiration. In addition, each party shall, at the disclosing party’s option,
return or destroy the Confidential Information of the other party and shall return any other
property of the other party to that other party.
Section 10. Limitation of Liability
(a) Other than with respect to a party’s willful misconduct, negligence, or fraud, in no event
shall a party’s liability under this Agreement exceed the total fees payable under this Agreement.
(b) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NO PARTY, NOR ANY OF ITS AFFILIATES OR
ITS OR THEIR REPRESENTATIVES (NOR ANY SUCCESSORS OR ASSIGNS OF SUCH PERSONS) SHALL BE LIABLE FOR
ANY INCIDENTAL, SPECIAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF
PROFIT OR LOSS OF REVENUE) OF THE OTHER PARTY, ITS SUCCESSORS, ASSIGNS OR THEIR RESPECTIVE
AFFILIATES AND REPRESENTATIVES, IN ANY WAY DUE TO, RESULTING FROM OR
6
ARISING IN CONNECTION WITH THIS AGREEMENT OR THE SERVICES PROVIDED HEREUNDER, REGARDLESS OF WHETHER
SUCH LIABILITY ARISES IN TORT (INCLUDING NEGLIGENCE), CONTRACT, BREACH OF WARRANTY, STRICT
LIABILITY, INDEMNIFICATION OR OTHERWISE AND REGARDLESS OF WHETHER ANY SUCH DAMAGES ARE FORESEEABLE
OR WHETHER A PERSON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES.
Section 11. Notices
All notices and other communications provided for herein shall be dated and in writing and in
English and shall be deemed to have been duly given (x) on the date of delivery, if delivered
personally or by facsimile, receipt confirmed, or (y) on the second following business day, if
delivered by a recognized overnight courier service within the United States, or (z) on the fifth
following business day, if delivered by international courier, in each case, to the party to whom
it is directed at the following address (or at such other address as any party shall hereafter
specify by notice in writing to the other party):
| (a) | If to CHH to: | ||
| Rank Group Limited Level Nine 000 Xxxx Xxxxxx X.X. Xxx 0000 Xxxxxxxx, Xxx Xxxxxxx Attention: Xxxxx Xxxxxxx Facsimile: x00 0 0000 0000 E-mail: xxxxx.xxxxxxx@xxxxxxxxx.xx.xx |
|||
| (b) | If to Evergreen to: | ||
| Xxxxxx X. Xxxxx Vice President & General Counsel Evergreen Packaging 0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxxxx 00000 XXX x00-000-000-0000 (office) x00-000-000-0000 (fax) |
7
| with a copy to: | |||
| Rank Group Level Nine, 000 Xxxx Xxxxxx X.X. Xxx 0000 Xxxxxxxx, Xxx Xxxxxxx Fax No.: x00 0 0000 0000 Attention: Xxxxx Xxxxxxx |
Section 12. Confidentiality of Information
(a) All data and information disclosed between the Service Provider and the Service Receiver
pursuant to this Agreement, including information relating to or received from third parties, is
deemed confidential, except for information that: (i) is or subsequently becomes part of the public
domain through no action of the receiving party, (ii) is subsequently received by the receiving
party from a third party which has no obligation of confidentiality to the party disclosing the
confidential information, or (iii) is independently developed by employees of the receiving party
who have had no access to the confidential information disclosed hereunder (“Confidential
Information”).
(b) A party receiving Confidential Information of the other party will not use such
information for any purpose other than for which it was disclosed and, except as otherwise
permitted by this Agreement, shall not disclose to third parties any Confidential Information.
(c) Notwithstanding Sections 12(a) and (b), Confidential Information may be disclosed by the
receiving party:
(i) to the receiving party’s affiliates, directors, officers, employees,
agents (including, in the case of the Service Provider, any third parties
engaged to
provide the Services), auditors, consultants and financial advisers
(collectively,
“Agents”), provided that (x) the relevant Agent reasonably needs to
know the
information, and (y) receiving party ensures that such Agents comply with this
Section 12; and
(ii) as required by applicable laws, provided that, if reasonably
practicable, written notice of such requirement shall be given promptly to the
disclosing party so that it may take reasonable actions to minimize the extent
of
such disclosure, and the receiving party shall cooperate with the disclosing
party
as reasonably requested by the disclosing party in connection with such
actions, at
the expense of the disclosing party.
(d) The receiving party shall notify the disclosing party in writing
immediately upon discovery of any unauthorized use or disclosure of the disclosing party’s
Confidential Information. If, at any time, the disclosing party determines that the receiving
party
has disclosed, or sought to disclose, the disclosing party’s Confidential Information in
violation
of this Agreement, that any unauthorized personnel of the receiving party has accessed the
disclosing party’s Confidential Information, or that the receiving party or any of its
personnel has
engaged in activities that may lead to the unauthorized access to, use of, or disclosure of
the
disclosing party’s Confidential Information, the disclosing party shall immediately terminate
any
8
such personnel’s access to its Confidential Information and immediately notify the receiving party.
In addition, either party shall have the right to deny personnel of the other party access to such
party’s Confidential Information upon notice to the other party in the event that such party
reasonably and in good faith believes that such personnel pose a security concern. Each party will
cooperate with the other party in investigating any apparent unauthorized access to or use of the
other party’s Confidential Information.
Section 13. Miscellaneous
(a) Severability. If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect. The parties shall
negotiate in good faith to replace the invalid, illegal or unenforceable provision with a valid,
legal and enforceable provision that has the effect nearest to that of the provision being
replaced.
(b) Interpretation. The headings contained in this Agreement are solely for the purpose of
reference, and shall not affect the interpretation of this Agreement. As used in this Agreement,
(i) an “affiliate” of, or a person “affiliated” with, a specified person, is a person directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common
control with, the person specified, and (ii) “including” shall mean including without limitation.
No provision of this Agreement will be construed adversely to a party solely on the ground that the
party was responsible for preparation of this Agreement or any provision of it.
(c) Counterparts. This Agreement may be executed and delivered (including by facsimile
transmission or otherwise electronically) simultaneously in counterparts, each of which when
executed will be deemed an original but all of which together will constitute one and the same
instrument.
(d) Entire Agreement. This Agreement and the Schedule referred to herein constitute the entire
agreement between the parties with respect to the subject matter hereof and supersede all other
prior agreements and understandings, both written and oral, between the parties with respect to the
subject matter hereof.
(e) Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be
binding upon and shall inure to the benefit of the parties and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned, directly or indirectly, including by operation of law, by any party without the
prior written consent of the other party. Notwithstanding the foregoing, either party may without
the consent of the other party assign any or all of its rights hereunder to any of its affiliates.
(f) Governing Law; Jurisdiction. This Agreement will be governed by, and construed and
enforced in accordance with, the laws of the State of New York (without giving effect to its
principles or rules of conflict of laws, to the extent such principles or rules are not mandatorily
applicable by statute and would permit or require the application of laws of any other
jurisdiction) as to all matters, including matters of validity, construction, effect,
9
performance and remedies. Each of the parties irrevocably and unconditionally submits itself and
its property to the exclusive jurisdiction of the Courts of the State of New York sitting in the
County of New York, the United States District Court for the Southern District of New York, and
appellate courts having jurisdiction of appeals from any of the foregoing.
(g) Amendment; Waivers, etc. An amendment or variation of this Agreement
must be in writing signed by the parties. Waiver of any right, power, authority, discretion or
remedy arising on a breach of or default under this Agreement must be in writing and signed by
the party granting the waiver. A party is not entitled to rely on the conduct of the other
party or
on a delay in the exercise or non-exercise of a right, power, authority, discretion or remedy
arising from a breach of this Agreement or default under this Agreement as constituting a
waiver
of that right, power, authority, discretion or remedy.
(h) Independent Contractor Status. The Service Provider shall be deemed to
be an independent contractor to the Service Receiver. Nothing contained in this Agreement
shall
create or be deemed to create the relationship of employer and employee between the Service
Provider and the Service Receiver or between the Service Provider’s employees and the Service
Receiver. The relationship created between the Service Provider and the Service Receiver
pursuant to or by this Agreement is not and shall not be one of partnership or joint venture.
No
party is now, shall become, or shall be deemed to be an agent or representative of the other
party.
(i) Survival. The following Sections and provisions shall survive any
termination or expiration of this Agreement: Section 1, Section 4, Section 6, the last
sentence of
Section 9(a) (including the provisions set forth therein), the last sentence of Section 9(b),
Section
9(d) and Sections 10-13.
(j) Further Assurances. Each party must execute and deliver such documents and take such other
action as may reasonably be required in order to consummate more effectively the transactions
contemplated by this Agreement.
(k) No Third-Party Beneficiaries. Except as otherwise provided herein, nothing in this
Agreement shall confer any rights upon any person or entity other than the parties and their
respective successors and permitted assigns.
[REMAINDER OF PAGE INTENTIONALLY BLANK — SIGNATURE PAGE TO FOLLOW]
10
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first
above written.
| XXXXXX XXXX XXXXXX LIMITED |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Authorized Signatory | |||
| EVERGREEN PACKAGING INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Authorized Signatory | |||
[Signature Page to Services Agreement between CHH and Evergreen]
SCHEDULE I
| Service | Monthly Fee (NZ$) | |||
Infotech Basis support |
10,560 | |||
Infotech Wintel support |
4,945 | |||
Infotech Networks support |
3,300 | |||
